US bailout plan drives investor appetite for govt securities

MANILA, Philippines - Investors flocked the Treasury bills auction on Monday with positive sentiment brewing from reports saying the US leaders have agreed to push through with the $700-billion package to rescue its credit market. The six-month and one-year Treasury bills were oversubscribed, with interest rates falling 16.4 and 25 basis points compared with their respective rates in the previous auction. "Positive news. There is already an agreement and it assures the markets that there is a way out," National Treasurer Roberto B Tan told reporters after the auction. The six-month sovereign papers received P6.27 billion worth of bids, but the auction committee accepted only P3 billion. It fetched an average rate of 6.312 percent. The P3-billion one-year sovereign debt was oversubscribed by P4.4 billion with a rate of 6.495 percent. As the third quarter comes to a close, Tan said the domestic borrowing program for the last quarter of the year will be available late Monday. The National Treasurer said the government has already borrowed close to the P260 billion programmed for 2008. - GMANews.TV